Business Forum • 16 February, 2026 at 5:07 PM
Romania's headline inflation rose to 9.6% in January 2026, a figure slightly exceeding market expectations due to a significant surge in utility costs.
According to an analysis by ING Bank Romania economists, while the headline figure remains elevated, the broader economic picture suggests a more benign underlying trend, with a year-end forecast maintained at 4.5%.
The primary catalyst for the January surprise was a 9.1% monthly increase in water supply and sanitation prices. When excluding this specific category, the inflation trajectory remains aligned with expectations. Food inflation reached 0.91% monthly, while non-food items rose by 0.51%. Conversely, the services sector is showing signs of cooling as broad-based pressures from last year begin to fade.
The current economic environment is increasingly contractionary, following a weaker-than-expected GDP release. Economists anticipate that this will act as a powerful disinflationary force in the coming quarters. While base effects may keep monthly prints near 9.0% in the short term, a more marked deceleration is expected around July or August.
Valentin Tătaru, Chief Economist at ING Bank Romania and Ștefan Posea, Economist at ING Bank Romania, said: "Despite the elevated headline, the underlying details show a more contained inflation backdrop. Given last week's weaker-than-expected GDP release, the economy is already experiencing a notable contraction, a development that should exert a powerful disinflationary force over the coming quarters."
Regarding monetary policy, the National Bank of Romania is expected to adopt a more dovish tone. Analysts predict the first interest rate cut of 25bp could occur in May, with total cuts for 2026 projected at 100bp.